Discussions and reflections--both popular and academic--on the necessity of creating an African Union government. Can Africa Unite?
"If not now, then when? If not here, then where? If not by us, then who?"

Wednesday, June 20, 2012

Last week, I used the context of the twin weekend crashes of 3 & 4 June to create the backdrop of a call to revise and re-visit some of what I consider to be "critical debates" in Africa and West Africa's aviation sector. That I refer to "debates" suggest there has been a history of discussions, campaigns and fights.

One would not been far from the truth, for advocacy organisations like the Nairobi-based Association of African Airlines(AFRAA), only as recently as November 2011, decried the EU's "EU Emission Trading Scheme (EU-ETS)", which it describes as "contrary to the principles of international law, the ICAO [UN's International Civil Aviation Organisation] Assembly resolution and not accepted by the majority of States outside the EU."

Another ongoing fight has centred around the EU's List of banned airlines (blacklisted). In AFRAA's Final Resolutions adopted by the 43rd Annual General Assembly in Morocco in November 2011, AFRAA has called upon "African governments, whose airlines are in the banned list, to take all necessary measures to enhance their safety oversight capacity and remove their country from the list." Finally, it touches on "the great threat the African aviation industry is facing as a result of the flight of highly-skilled and professional manpower and the need for urgent action." The resolution notes how the Secretariat of AFRAA has initiated plans "...[on] several projects such as joint fuel purchase, route coordination..."

Despite all these concerns, it must be noted how the debates have regrettably largely operated on the blindside of discussions on African integration or development in Africa.

In my preparatory readings for this second of a three-parter looking at the aviation industry, I myself feel like I have touched on a topic so esoteric and specialised that it requires the knowledge and passion of an expert to explain them. Truth be told, the more one reads, the more one realises that it is more of the same of the quintessential turf wars that populate the literature of the fight between the West and the Global South, especially Africa, for its own policy space.

Enter the Yamoussoukro DeclarationBefore your eyes glaze over, consider this: it has been no less than ten years since the Yamoussoukro Decision(YD) entered into force. Established as part of the African Economic Community (AEC), it is an instrument considered as one of the most important air transport reform policy initiatives in Africa. It involves, according to NEPAD, "a continent-wide comprehensive program of agreements of principles and concepts to promote the gradual liberalization of scheduled and non-scheduled air transport services intra-Africa only."

Put simply, the Decision calls for an open skies policy with: no restrictions on traffic rights, including the fifth freedom [the right or priviledge , in respect of scheduled international air services, granted by one State to another...to put down and to take on....]; no restrictions on capacity and frequency between city pairs; no tariffs regulation by government; allows for multiple designation; and liberalization of air cargo and non-scheduled air services.

When fully implemented (yes, there have been degrees of implementation), the YD will seek to replace the current fragmented regulatory regime by a unified system allowing airlines commercial opportunities on an equal basis , and ensure their activities will be governed by a common body of aviation rules. Once fully implemented, some of the YD's expected impacts include: improvement of the African air transport network and increases of traffic; lower fares and tariffs; reduction and or elimination of subsidies in the sector; and the merger and more cooperation of airlines.

Implementation status of the YDIt is important to note that while it has been a decade since the YD went into force, it is not all gloom and doom as out of the-then 53 AU member states in 1999 (when it was adopted) no less than 44 countries signed the Decision in 1999, committing them after ratification, to gradually implement the open skies policy agreed upon in this treaty. The non-signatories were 10, and included South Africa; Djibouti; Eritrea; Gabon; Equatorial Guinea; Madagascar; Morocco; Mauritania; Somalia; and Swaziland.

Furthermore, there have been a number of noteworthy positive effects of the YD. For example, in several regional economic communities(RECs), there has been an increased cooperation in airline operations – code-sharing; cross-border investment, including initiatives to create regional airlines with the involvement of the private sector. Examples include the putative "ECOWAS airline", which is based in Togo (with support from ECOBANK; UEMOA; Ecowas Bank of Investment and Development, among others) and known as ASKY; Air CEMAC; Royal Air Maroc / Air Senegal International. In addition, there has been more granting of the 5th Freedom traffic rights; the setting-up of coordination institutions to strengthen regional civil aviation oversight; and an increased regional consultation and decision-making on air transport matters.

Despite the apparent absence of the African Union in airline advocacy, it has not been as absent as one might believe. This is because the African Union Commission(AUC) continues to work to strengthen its specialised agency (touched on last week) – the African Civil Aviation Commission (AFCAC) and its mandate, as well as its capacity in relation to the Executing Agency. The AUC still has supervisory oversight of the New AFCAC Constitution, which was completed in May 2010; and its secretariat is established with ongoing secondments; recruitment to carry out studies on institutional, regulatory and financing arrangements.

Outcomes of the Second Session of the AU Conference of Ministers Responsible for Transport

From 21-25 November, 2011, AU ministers responsible for Transport met in Luanda to deliberate on the Implementation of the Yamoussoukro Decision on Aeronautical Taxes, Charges and Fees. A report for the meeting reveals that there are a number of factors that influence the imposition of unjustifiably High Taxes, Charges and Fees (TCFs), and that there may be several factors contributing towards this policy approach.

First, the nature of air transport makes it a convenient subject of indirect taxation. The report maintains "as a high-revenue industry...aviation tax collection is inexpensive and convenient for the Treasury and others that seek to raise funds even for projects and activities unrelated to aviation." Secondly, "air transport is politically vulnerable, lacking any large lobbying block to protect its interests at national and regional level."

There are a number of points for the recommendation of the Declaration, but two major points make worthy reading. First, given that African airlines "strongly oppose the use of charges and taxes for revenue-raising purposes", charges should reflect cost-recovery principles while taxes require a strong economic justification. Second, "all stakeholders in the value chain of transport service should cooperate and work together to improve the productivity and cost effectiveness which translate into lower charges to the airlines and users of air transport. The report concludes that "reducing the cost of travel must be the goals of all stakeholders and should not be left to the air operators alone."

Finally, if there is anything one must take out of this article, it is the fact that while there remain solutions to the current state of African aviation, African policymakers can probably do more than they have done. Secondly, the issue of taxes remains a cardinal problem that must needs be resolved. It is unacceptable that the average passenger TCF on return trips for air travel between the main African Regional Airports ranges from the highest average of USD29.45 and the lowest average of 19USD19.27 in North Africa to very high taxes in West Africa. In my view, we should begin to ask questions why air travel between the West/Central Africa airports have the highest average TCFs, with the highest being USD125 and the lowest USD70. Why such a discrepancy?

Saturday 23 June will be three weeks since the twin crashes. Are we still counting down to the outcome of the report from the established committee?

In 2009, in his capacity as a "Do More Talk Less Ambassador" of the 42nd Generation—an NGO that promotes and discusses Pan-Africanism--Emmanuel gave a series of lectures on the role of ECOWAS and the AU in facilitating a Pan-African identity. Emmanuel owns "Critiquing Regionalism" (http://www.critiquing-regionalism.org). Established in 2004 as an initiative to respond to the dearth of knowledge on global regional integration initiatives worldwide, this non-profit blog features regional integration initiatives on MERCOSUR/EU/Africa/Asia and many others. You can reach him on ekbensah@ekbensah.net / Mobile: 0268.687.653.